Key Highlights
- First quarter adjusted earnings per share reached $0.57, surpassing the Street consensus of $0.55
- Total revenue hit $31.5 billion, marking a 2.9% yearly increase and exceeding the $31.25 billion forecast
- Postpaid phone subscriber net additions totaled 294,000, outperforming the 270,000 analyst projection
- Shares climbed 0.8% in response to the quarterly report
- Management confirmed its complete 2026 full-year outlook, projecting free cash flow of no less than $18 billion
The telecommunications giant delivered a robust first quarter performance on Wednesday, surpassing analyst projections across key financial and operational metrics.
The company’s adjusted earnings per share registered at $0.57, exceeding the consensus forecast of $0.55. Total revenue climbed to $31.5 billion, representing a 2.9% year-over-year expansion and beating the anticipated $31.25 billion.
Shares responded positively, advancing 0.8% following the earnings release.
The carrier welcomed 294,000 postpaid phone net additions during the three-month period. Wall Street had projected approximately 270,000 to 272,000 additions, making this a notable outperformance.
The company’s bundling approach continues to gain traction. Between 42% and 45% of home internet subscribers also maintain a wireless service plan with AT&T — a convergence strategy that’s proving increasingly effective.
Broadband subscriber growth totaled 584,000 for the quarter, evenly distributed between fiber (292,000) and fixed wireless (292,000) offerings.
AT&T and competitor T-Mobile both maintained aggressive device subsidy programs throughout the first quarter, engaging in intense customer acquisition efforts through iPhone promotions and plan incentives.
Pricing Adjustments
The telecom provider implemented price increases on both its entry-level and premium wireless service tiers. This strategic move aims to encourage migration to mid-tier offerings while boosting average revenue per user metrics.
Industry observers suggest the pricing adjustment represents a tactical shift designed to optimize customer value rather than triggering broader industry pricing competition.
Business Unit Realignment
This quarter marked the introduction of a restructured segment reporting framework designed to highlight the company’s primary growth engines.
The newly created Advanced Connectivity division — encompassing domestic 5G infrastructure and fiber services — delivered approximately 5% revenue expansion. Service revenue within this unit increased 3.6% year-over-year to $22.9 billion. Operating income surged 14.8% to $6.9 billion.
Part of this expansion resulted from the integration of the mass market fiber operations acquired from Lumen.
Free cash flow registered at $2.5 billion, declining from $3.1 billion in the comparable year-ago period. This reduction reflects elevated capital deployment as the company accelerates its fiber network expansion.
Capital investments for the quarter totaled $4.9 billion, up from $4.3 billion in the prior-year quarter.
CEO John Stankey characterized the performance as the “best first quarter ever for Advanced Connectivity internet customer net additions.”
Management reiterated its complete 2026 annual guidance: adjusted earnings per share between $2.25 and $2.35, EBITDA expansion of 3% to 4%, and free cash flow of at least $18 billion.
The telecommunications provider also confirmed its commitment to repurchase roughly $8 billion worth of shares throughout 2026.
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